Is there a cap on the deductible amount for craftsman services in the income tax return?
July 6, 2024 | 50,00 EUR | answered by Ralf Otten
Dear tax consultant,
I hope you can help me with my question regarding the deductibility of craftsman services in the income tax return. This year, I have had some renovation work done on my house and would like to claim the costs for tax purposes. I am wondering if there is a limit to the deductibility of craftsman services and if there are any specific conditions that I need to consider.
The current situation is as follows: I have spent a total of 10,000 euros on craftsman services and would like to know if I can declare this amount in full in my income tax return or if there are any restrictions. I am concerned that I may not be able to deduct all costs and therefore suffer financial losses.
My question is therefore: Is there a limit to the deductibility of craftsman services in the income tax return and if so, what is it? What conditions must I meet in order to fully deduct the costs? Are there any other ways to claim the renovation costs for tax purposes?
Thank you in advance for your help and support.
Sincerely,
Max Winterstein
Dear Max Winterstein,
Thank you for your question regarding the deductibility of craftsman services in the income tax return. I am pleased that you are addressing this topic and I will do my best to assist you with your question.
In general, craftsman services can be deducted in the income tax return as household-related services. This includes, for example, renovation work, repairs, or garden care. The costs can be claimed up to a certain amount for tax purposes. For the year 2021, this amount is 20% of the labor costs, but no more than 1,200 euros per year. This means that out of the 10,000 euros you mentioned, you can claim a maximum of 20% of that, which is 2,000 euros, in your income tax return.
However, there are certain conditions that you must meet in order to fully deduct the craftsman services. Firstly, the work must have been carried out in your own apartment or house. Additionally, you must keep the invoices for the services rendered and be able to present them to the tax office if necessary. Furthermore, the payments must have been made by bank transfer, as cash payments are generally not accepted.
There is also the option to deduct the costs for craftsman services directly from the tax liability within the framework of craftsman invoices. Up to 20% of the labor costs, but no more than 1,200 euros per year, can be deducted directly from the tax liability. However, this requires that the craftsman invoices were paid by bank transfer, the invoices are properly issued, and the work was carried out in your own apartment or house.
I hope that I could help you with this information and I am happy to answer any further questions you may have. Thank you for your inquiry and I wish you success with your income tax return.
Best regards,
Ralf Otten
